PERSONAL AUTO POLICY

PERSONAL AUTO

PP 00 01 06 98

Page 1 of 12

AGREEMENT

In return for payment of the premium and subject to all the terms of this policy, we agree with you as follows:

DEFINITIONS

A. Throughout this policy, "you" and "your" refer to:

1. The "named insured" shown in the Declara-

tions; and

2. The spouse if a resident of the same house-

hold.

If the spouse ceases to be a resident of the same

household during the policy period or prior to the

inception of this policy, the spouse will be consid-

ered "you" and "your" under this policy but only

until the earlier of:

1. The end of 90 days following the spouse's

change of residency;

2. The effective date of another policy listing the

spouse as a named insured; or

3. The end of the policy period.

B. "We", "us" and "our" refer to the Company provid-

ing this insurance.

C. For purposes of this policy, a private passenger

type auto, pickup or van shall be deemed to be

owned by a person if leased:

1. Under a written agreement to that person; and

2. For a continuous period of at least 6 months.

Other words and phrases are defined. They are in

quotation marks when used.

D. "Bodily injury" means bodily harm, sickness or

disease, including death that results.

E. "Business" includes trade, profession or occupa-

tion.

F. "Family member" means a person related to you

by blood, marriage or adoption who is a resident

of your household. This includes a ward or foster

child.

G. "Occupying" means in, upon, getting in, on, out or

off.

H. "Property damage" means physical injury to, de-

struction of or loss of use of tangible property.

I. "Trailer" means a vehicle designed to be pulled by

1. Private passenger auto; or

2. Pickup or van.

It also means a farm wagon or farm implement

while towed by a vehicle listed in 1. or 2. above.

J. "Your covered auto" means:

1. Any vehicle shown in the Declarations.

2. A "newly acquired auto".

3. Any "trailer" you own.

4. Any auto or "trailer" you do not own while used

as a temporary substitute for any other vehicle

described in this definition which is out of nor-

mal use because of its:

a. Breakdown;

b. Repair;

c. Servicing;

d. Loss; or

e. Destruction.

This Provision (J.4.) does not apply to Cover-

age For Damage To Your Auto.

K. "Newly acquired auto":

1. "Newly acquired auto" means any of the follow-

ing types of vehicles you become the owner of

during the policy period:

a. A private passenger auto; or

b. A pickup or van, for which no other insur-

ance policy provides coverage, that:

(1) Has a Gross Vehicle Weight of less

than 10,000 lbs.; and

(2) Is not used for the delivery or transpor-

tation of goods and materials unless

such use is:

(a) Incidental to your "business" of in-

stalling, maintaining or repairing

furnishings or equipment; or

(b) For farming or ranching.

2. Coverage for a "newly acquired auto" is pro-

vided as described below. If you ask us to in-

sure a "newly acquired auto" after a specified

time period described below has elapsed, any

coverage we provide for a "newly acquired

auto" will begin at the time you request the

coverage.

a. For any coverage provided in this policy

except Coverage For Damage To Your

Auto, a "newly acquired auto" will have the

broadest coverage we now provide for any

vehicle shown in the Declarations. Cover-

age begins on the date you become the

owner. However, for this coverage to apply

to a "newly acquired auto" which is in addi-

tion to any vehicle shown in the Declara-

tions, you must ask us to insure it within 14

days after you become the owner.

Page 2 of 12

PP 00 01 06 98

If a "newly acquired auto" replaces a vehi-

cle shown in the Declarations, coverage is

provided for this vehicle without your hav-

ing to ask us to insure it.

b. Collision Coverage for a "newly acquired

auto" begins on the date you become the

owner. However, for this coverage to apply,

you must ask us to insure it within:

(1) 14 days after you become the owner if

the Declarations indicate that Collision

Coverage applies to at least one auto.

In this case, the "newly acquired auto"

will have the broadest coverage we now

provide for any auto shown in the Dec-

larations.

(2) Four days after you become the owner

if the Declarations do not indicate that

Collision Coverage applies to at least

one auto. If you comply with the 4 day

requirement and a loss occurred before

you asked us to insure the "newly ac-

quired auto", a Collision deductible of

$500 will apply.

c. Other Than Collision Coverage for a "newly

acquired auto" begins on the date you be-

come the owner. However, for this cover-

age to apply, you must ask us to insure it

within:

(1) 14 days after you become the owner if

the Declarations indicate that Other

Than Collision Coverage applies to at

least one auto. In this case, the "newly

acquired auto" will have the broadest

coverage we now provide for any auto

shown in the Declarations.

(2) Four days after you become the owner

if the Declarations do not indicate that

Other Than Collision Coverage applies

to at least one auto. If you comply with

the 4 day requirement and a loss oc-

curred before you asked us to insure the

"newly acquired auto", an Other Than

Collision deductible of $500 will apply.

PART A – LIABILITY COVERAGE

INSURING AGREEMENT

A. We will pay damages for "bodily injury" or

"property damage" for which any "insured" be-

comes legally responsible because of an auto ac-

cident. Damages include prejudgment interest

awarded against the "insured". We will settle or

defend, as we consider appropriate, any claim or

suit asking for these damages. In addition to our

limit of liability, we will pay all defense costs we

incur. Our duty to settle or defend ends when our

limit of liability for this coverage has been ex-

hausted by payment of judgments or settlements.

We have no duty to defend any suit or settle any

claim for "bodily injury" or "property damage" not

covered under this policy.

B. "Insured" as used in this Part means:

1. You or any "family member" for the ownership,

maintenance or use of any auto or "trailer".

2. Any person using "your covered auto".

3. For "your covered auto", any person or organi-

zation but only with respect to legal responsi-

bility for acts or omissions of a person for

whom coverage is afforded under this Part.

4. For any auto or "trailer", other than "your cov-

ered auto", any other person or organization

but only with respect to legal responsibility for

acts or omissions of you or any "family mem-

ber" for whom coverage is afforded under this

Part. This Provision (B.4.) applies only if the

person or organization does not own or hire the

auto or "trailer".

SUPPLEMENTARY PAYMENTS

In addition to our limit of liability, we will pay on be-

half of an "insured":

1. Up to $250 for the cost of bail bonds required

because of an accident, including related traf-

fic law violations. The accident must result in

"bodily injury" or "property damage" covered

under this policy.

2. Premiums on appeal bonds and bonds to re-

lease attachments in any suit we defend.

3. Interest accruing after a judgment is entered in

any suit we defend. Our duty to pay interest

ends when we offer to pay that part of the

judgment which does not exceed our limit of li-

ability for this coverage.

4. Up to $200 a day for loss of earnings, but not

other income, because of attendance at hear-

ings or trials at our request.

5. Other reasonable expenses incurred at our

request.

EXCLUSIONS

A. We do not provide Liability Coverage for any

"insured":

1. Who intentionally causes "bodily injury" or

"property damage".

2. For "property damage" to property owned or

being transported by that "insured".

PP 00 01 06 98

Page 3 of 12

3. For "property damage" to property:

a. Rented to;

b. Used by; or

c. In the care of;

that "insured".

This Exclusion (A.3.) does not apply to

"property damage" to a residence or private

garage.

4. For "bodily injury" to an employee of that

"insured" during the course of employment.

This Exclusion (A.4.) does not apply to "bodily

injury" to a domestic employee unless workers'

compensation benefits are required or avail-

able for that domestic employee.

5. For that "insured's" liability arising out of the

ownership or operation of a vehicle while it is

being used as a public or livery conveyance.

This Exclusion (A.5.) does not apply to a

share-the-expense car pool.

6. While employed or otherwise engaged in the

"business" of:

a. Selling;

b. Repairing;

c. Servicing;

d. Storing; or

e. Parking;

vehicles designed for use mainly on public

highways. This includes road testing and deliv-

ery. This Exclusion (A.6.) does not apply to the

ownership, maintenance or use of "your cov-

ered auto" by:

a. You;

b. Any "family member"; or

c. Any partner, agent or employee of you or

any "family member".

7. Maintaining or using any vehicle while that

"insured" is employed or otherwise engaged in

any "business" (other than farming or ranching)

not described in Exclusion A.6.

This Exclusion (A.7.) does not apply to the

maintenance or use of a:

a. Private passenger auto;

b. Pickup or van; or

c. "Trailer" used with a vehicle described in a.

or b. above.

8. Using a vehicle without a reasonable belief

that that "insured" is entitled to do so. This

Exclusion (A.8.) does not apply to a "family

member" using "your covered auto" which is

owned by you.

9. For "bodily injury" or "property damage" for

which that "insured":

a. Is an insured under a nuclear energy liabil-

ity policy; or

b. Would be an insured under a nuclear en-

ergy liability policy but for its termination

upon exhaustion of its limit of liability.

A nuclear energy liability policy is a policy is-

sued by any of the following or their succes-

sors:

a. Nuclear Energy Liability Insurance Asso-

ciation;

b. Mutual Atomic Energy Liability Underwrit-

ers; or

c. Nuclear Insurance Association of Canada.

B. We do not provide Liability Coverage for the own-

ership, maintenance or use of:

1. Any vehicle which:

a. Has fewer than four wheels; or

b. Is designed mainly for use off public roads.

This Exclusion (B.1.) does not apply:

a. While such vehicle is being used by an

"insured" in a medical emergency;

b. To any "trailer"; or

c. To any non-owned golf cart.

2. Any vehicle, other than "your covered auto",

which is:

a. Owned by you; or

b. Furnished or available for your regular use.

3. Any vehicle, other than "your covered auto",

which is:

a. Owned by any "family member"; or

b. Furnished or available for the regular use

of any "family member".

However, this Exclusion (B.3.) does not apply

to you while you are maintaining or

"occupying" any vehicle which is:

a. Owned by a "family member"; or

b. Furnished or available for the regular use

of a "family member".

4. Any vehicle, located inside a facility designed

for racing, for the purpose of:

a. Competing in; or

b. Practicing or preparing for;

any prearranged or organized racing or speed

contest.

Page 4 of 12

PP 00 01 06 98

LIMIT OF LIABILITY

A. The limit of liability shown in the Declarations for

each person for Bodily Injury Liability is our

maximum limit of liability for all damages, includ-

ing damages for care, loss of services or death,

arising out of "bodily injury" sustained by any one

person in any one auto accident. Subject to this

limit for each person, the limit of liability shown in

the Declarations for each accident for Bodily In-

jury Liability is our maximum limit of liability for all

damages for "bodily injury" resulting from any one

auto accident.

The limit of liability shown in the Declarations for

each accident for Property Damage Liability is our

maximum limit of liability for all "property dam-

age" resulting from any one auto accident.

This is the most we will pay regardless of the

number of:

1. "Insureds";

2. Claims made;

3. Vehicles or premiums shown in the Declara-

tions; or

4. Vehicles involved in the auto accident.

B. No one will be entitled to receive duplicate pay-

ments for the same elements of loss under this

coverage and:

1. Part B or Part C of this policy; or

2. Any Underinsured Motorists Coverage pro-

vided by this policy.

OUT OF STATE COVERAGE

If an auto accident to which this policy applies occurs

in any state or province other than the one in which

"your covered auto" is principally garaged, we will

interpret your policy for that accident as follows:

A. If the state or province has:

1. A financial responsibility or similar law specify-

ing limits of liability for "bodily injury" or

"property damage" higher than the limit shown

in the Declarations, your policy will provide the

higher specified limit.

2. A compulsory insurance or similar law requir-

ing a nonresident to maintain insurance when-

ever the nonresident uses a vehicle in that

state or province, your policy will provide at

least the required minimum amounts and types

of coverage.

B. No one will be entitled to duplicate payments for

the same elements of loss.

FINANCIAL RESPONSIBILITY

When this policy is certified as future proof of finan-

cial responsibility, this policy shall comply with the

law to the extent required.

OTHER INSURANCE

If there is other applicable liability insurance we will

pay only our share of the loss. Our share is the pro-

portion that our limit of liability bears to the total of all

applicable limits. However, any insurance we provide

for a vehicle you do not own shall be excess over any

other collectible insurance.

PART B – MEDICAL PAYMENTS COVERAGE

INSURING AGREEMENT

A. We will pay reasonable expenses incurred for

necessary medical and funeral services because

of "bodily injury":

1. Caused by accident; and

2. Sustained by an "insured".

We will pay only those expenses incurred for

services rendered within 3 years from the date of

the accident.

B. "Insured" as used in this Part means:

1. You or any "family member":

a. While "occupying"; or

b. As a pedestrian when struck by;

a motor vehicle designed for use mainly on

public roads or a trailer of any type.

2. Any other person while "occupying" "your cov-

ered auto".

EXCLUSIONS

We do not provide Medical Payments Coverage for

any "insured" for "bodily injury":

1. Sustained while "occupying" any motorized

vehicle having fewer than four wheels.

2. Sustained while "occupying" "your covered

auto" when it is being used as a public or livery

conveyance. This Exclusion (2.) does not ap-

ply to a share-the-expense car pool.

3. Sustained while "occupying" any vehicle lo-

cated for use as a residence or premises.

4. Occurring during the course of employment if

workers' compensation benefits are required or

available for the "bodily injury".

5. Sustained while "occupying", or when struck

by, any vehicle (other than "your covered

auto") which is:

a. Owned by you; or

b. Furnished or available for your regular use.

6. Sustained while "occupying", or when struck

by, any vehicle (other than "your covered

auto") which is:

a. Owned by any "family member"; or

b. Furnished or available for the regular use

of any "family member".

However, this Exclusion (6.) does not apply to

you.

PP 00 01 06 98

Page 5 of 12

7. Sustained while "occupying" a vehicle without

a reasonable belief that that "insured" is enti-

tled to do so. This Exclusion (7.) does not ap-

ply to a "family member" using "your covered

auto" which is owned by you.

8. Sustained while "occupying" a vehicle when it

is being used in the "business" of an "insured".

This Exclusion (8.) does not apply to "bodily

injury" sustained while "occupying" a:

a. Private passenger auto;

b. Pickup or van that you own; or

c. "Trailer" used with a vehicle described in a.

or b. above.

9. Caused by or as a consequence of:

a. Discharge of a nuclear weapon (even if

accidental);

b. War (declared or undeclared);

c. Civil war;

d. Insurrection; or

e. Rebellion or revolution.

10. From or as a consequence of the following,

whether controlled or uncontrolled or however

caused:

a. Nuclear reaction;

b. Radiation; or

c. Radioactive contamination.

11. Sustained while "occupying" any vehicle lo-

cated inside a facility designed for racing, for

the purpose of:

a. Competing in; or

b. Practicing or preparing for;

any prearranged or organized racing or speed

contest.

LIMIT OF LIABILITY

A. The limit of liability shown in the Declarations for

this coverage is our maximum limit of liability for

each person injured in any one accident. This is

the most we will pay regardless of the number of:

1. "Insureds";

2. Claims made;

3. Vehicles or premiums shown in the Declara-

tions; or

4. Vehicles involved in the accident.

B. No one will be entitled to receive duplicate pay-

ments for the same elements of loss under this

coverage and:

1. Part A or Part C of this policy; or

2. Any Underinsured Motorists Coverage pro-

vided by this policy.

OTHER INSURANCE

If there is other applicable auto medical payments

insurance we will pay only our share of the loss. Our

share is the proportion that our limit of liability bears

to the total of all applicable limits. However, any

insurance we provide with respect to a vehicle you do

not own shall be excess over any other collectible

auto insurance providing payments for medical or

funeral expenses.

PART C – UNINSURED MOTORISTS COVERAGE

INSURING AGREEMENT

A. We will pay compensatory damages which an

"insured" is legally entitled to recover from the

owner or operator of an "uninsured motor vehicle"

because of "bodily injury":

1. Sustained by an "insured"; and

2. Caused by an accident.

The owner's or operator's liability for these dam-

ages must arise out of the ownership, mainte-

nance or use of the "uninsured motor vehicle".

Any judgment for damages arising out of a suit

brought without our written consent is not binding

on us.

B. "Insured" as used in this Part means:

1. You or any "family member".

2. Any other person "occupying" "your covered

auto".

3. Any person for damages that person is entitled

to recover because of "bodily injury" to which

this coverage applies sustained by a person

described in 1. or 2. above.

C. "Uninsured motor vehicle" means a land motor

vehicle or trailer of any type:

1. To which no bodily injury liability bond or policy

applies at the time of the accident.

2. To which a bodily injury liability bond or policy

applies at the time of the accident. In this case

its limit for bodily injury liability must be less

than the minimum limit for bodily injury liability

specified by the financial responsibility law of

the state in which "your covered auto" is prin-

cipally garaged.

Page 6 of 12

PP 00 01 06 98

3. Which is a hit-and-run vehicle whose operator

or owner cannot be identified and which hits:

a. You or any "family member";

b. A vehicle which you or any "family mem-

ber" are "occupying"; or

c. "Your covered auto".

4. To which a bodily injury liability bond or policy

applies at the time of the accident but the

bonding or insuring company:

a. Denies coverage; or

b. Is or becomes insolvent.

However, "uninsured motor vehicle" does not in-

clude any vehicle or equipment:

1. Owned by or furnished or available for the

regular use of you or any "family member".

2. Owned or operated by a self-insurer under any

applicable motor vehicle law, except a self-

insurer which is or becomes insolvent.

3. Owned by any governmental unit or agency.

4. Operated on rails or crawler treads.

5. Designed mainly for use off public roads while

not on public roads.

6. While located for use as a residence or prem-

ises.

EXCLUSIONS

A. We do not provide Uninsured Motorists Coverage

for "bodily injury" sustained:

1. By an "insured" while "occupying", or when

struck by, any motor vehicle owned by that

"insured" which is not insured for this coverage

under this policy. This includes a trailer of any

type used with that vehicle.

2. By any "family member" while "occupying", or

when struck by, any motor vehicle you own

which is insured for this coverage on a primary

basis under any other policy.

B. We do not provide Uninsured Motorists Coverage

for "bodily injury" sustained by any "insured":

1. If that "insured" or the legal representative

settles the "bodily injury" claim without our

consent.

2. While "occupying" "your covered auto" when it

is being used as a public or livery conveyance.

This Exclusion (B.2.) does not apply to a

share-the-expense car pool.

3. Using a vehicle without a reasonable belief

that that "insured" is entitled to do so. This

Exclusion (B.3.) does not apply to a "family

member" using "your covered auto" which is

owned by you.

C. This coverage shall not apply directly or indirectly

to benefit any insurer or self-insurer under any of

the following or similar law:

1. Workers' compensation law; or

2. Disability benefits law.

D. We do not provide Uninsured Motorists Coverage

for punitive or exemplary damages.

LIMIT OF LIABILITY

A. The limit of liability shown in the Declarations for

each person for Uninsured Motorists Coverage is

our maximum limit of liability for all damages, in-

cluding damages for care, loss of services or

death, arising out of "bodily injury" sustained by

any one person in any one accident. Subject to

this limit for each person, the limit of liability

shown in the Declarations for each accident for

Uninsured Motorists Coverage is our maximum

limit of liability for all damages for "bodily injury"

resulting from any one accident.

This is the most we will pay regardless of the

number of:

1. "Insureds";

2. Claims made;

3. Vehicles or premiums shown in the Declara-

tions; or

4. Vehicles involved in the accident.

B. No one will be entitled to receive duplicate pay-

ments for the same elements of loss under this

coverage and:

1. Part A. or Part B. of this policy; or

2. Any Underinsured Motorists Coverage pro-

vided by this policy.

C. We will not make a duplicate payment under this

coverage for any element of loss for which pay-

ment has been made by or on behalf of persons

or organizations who may be legally responsible.

D. We will not pay for any element of loss if a person

is entitled to receive payment for the same ele-

ment of loss under any of the following or similar

law:

1. Workers' compensation law; or

2. Disability benefits law.

OTHER INSURANCE

If there is other applicable insurance available under

one or more policies or provisions of coverage that is

similar to the insurance provided under this Part of

the policy:

1. Any recovery for damages under all such poli-

cies or provisions of coverage may equal but

not exceed the highest applicable limit for any

one vehicle under any insurance providing

coverage on either a primary or excess basis.

2. Any insurance we provide with respect to a

vehicle you do not own shall be excess over

any collectible insurance providing such cov-

erage on a primary basis.

PP 00 01 06 98

Page 7 of 12

3. If the coverage under this policy is provided:

a. On a primary basis, we will pay only our

share of the loss that must be paid under

insurance providing coverage on a primary

basis. Our share is the proportion that our

limit of liability bears to the total of all ap-

plicable limits of liability for coverage pro-

vided on a primary basis.

b. On an excess basis, we will pay only our

share of the loss that must be paid under

insurance providing coverage on an excess

basis. Our share is the proportion that our

limit of liability bears to the total of all ap-

plicable limits of liability for coverage pro-

vided on an excess basis.

ARBITRATION

A. If we and an "insured" do not agree:

1. Whether that "insured" is legally entitled to

recover damages; or

2. As to the amount of damages which are re-

coverable by that "insured";

from the owner or operator of an "uninsured motor

vehicle", then the matter may be arbitrated. How-

ever, disputes concerning coverage under this

Part may not be arbitrated.

Both parties must agree to arbitration. If so

agreed, each party will select an arbitrator. The

two arbitrators will select a third. If they cannot

agree within 30 days, either may request that se-

lection be made by a judge of a court having ju-

risdiction.

B. Each party will:

1. Pay the expenses it incurs; and

2. Bear the expenses of the third arbitrator

equally.

C. Unless both parties agree otherwise, arbitration

will take place in the county in which the "insured"

lives. Local rules of law as to procedure and evi-

dence will apply. A decision agreed to by two of

the arbitrators will be binding as to:

1. Whether the "insured" is legally entitled to

recover damages; and

2. The amount of damages. This applies only if

the amount does not exceed the minimum limit

for bodily injury liability specified by the finan-

cial responsibility law of the state in which

"your covered auto" is principally garaged. If

the amount exceeds that limit, either party may

demand the right to a trial. This demand must

be made within 60 days of the arbitrators' de-

cision. If this demand is not made, the amount

of damages agreed to by the arbitrators will be

binding.

PART D – COVERAGE FOR DAMAGE TO YOUR AUTO

INSURING AGREEMENT

A. We will pay for direct and accidental loss to "your

covered auto" or any "non-owned auto", including

their equipment, minus any applicable deductible

shown in the Declarations. If loss to more than

one "your covered auto" or "non-owned auto" re-

sults from the same "collision", only the highest

applicable deductible will apply. We will pay for

loss to "your covered auto" caused by:

1. Other than "collision" only if the Declarations

indicate that Other Than Collision Coverage is

provided for that auto.

2. "Collision" only if the Declarations indicate that

Collision Coverage is provided for that auto.

If there is a loss to a "non-owned auto", we will

provide the broadest coverage applicable to any

"your covered auto" shown in the Declarations.

B. "Collision" means the upset of "your covered auto"

or a "non-owned auto" or their impact with another

vehicle or object.

Loss caused by the following is considered other

than "collision":

1. Missiles or falling objects;

2. Fire;

3. Theft or larceny;

4. Explosion or earthquake;

5. Windstorm;

6. Hail, water or flood;

7. Malicious mischief or vandalism;

8. Riot or civil commotion;

9. Contact with bird or animal; or

10. Breakage of glass.

If breakage of glass is caused by a "collision", you

may elect to have it considered a loss caused by

"collision".

C. "Non-owned auto" means:

1. Any private passenger auto, pickup, van or

"trailer" not owned by or furnished or available

for the regular use of you or any "family mem-

ber" while in the custody of or being operated

by you or any "family member"; or

2. Any auto or "trailer" you do not own while used

as a temporary substitute for "your covered

auto" which is out of normal use because of its:

a. Breakdown;

b. Repair;

c. Servicing;

d. Loss; or

e. Destruction.

Page 8 of 12

PP 00 01 06 98

TRANSPORTATION EXPENSES

A. In addition, we will pay, without application of a

deductible, up to a maximum of $600 for:

1. Temporary transportation expenses not ex-

ceeding $20 per day incurred by you in the

event of a loss to "your covered auto". We will

pay for such expenses if the loss is caused by:

a. Other than "collision" only if the Declara-

tions indicate that Other Than Collision

Coverage is provided for that auto.

b. "Collision" only if the Declarations indicate

that Collision Coverage is provided for that

auto.

2. Expenses for which you become legally re-

sponsible in the event of loss to a "non-owned

auto". We will pay for such expenses if the loss

is caused by:

a. Other than "collision" only if the Declara-

tions indicate that Other Than Collision

Coverage is provided for any "your covered

auto".

b. "Collision" only if the Declarations indicate

that Collision Coverage is provided for any

"your covered auto".

However, the most we will pay for any ex-

penses for loss of use is $20 per day.

B. If the loss is caused by:

1. A total theft of "your covered auto" or a "non-

owned auto", we will pay only expenses in-

curred during the period:

a. Beginning 48 hours after the theft; and

b. Ending when "your covered auto" or the

"non-owned auto" is returned to use or we

pay for its loss.

2. Other than theft of a "your covered auto" or a

"non-owned auto", we will pay only expenses

beginning when the auto is withdrawn from use

for more than 24 hours.

C. Our payment will be limited to that period of time

reasonably required to repair or replace the "your

covered auto" or the "non-owned auto".

EXCLUSIONS

We will not pay for:

1. Loss to "your covered auto" or any "non-owned

auto" which occurs while it is being used as a

public or livery conveyance. This Exclusion

(1.) does not apply to a share-the-expense car

pool.

2. Damage due and confined to:

a. Wear and tear;

b. Freezing;

c. Mechanical or electrical breakdown or

failure; or

d. Road damage to tires.

This Exclusion (2.) does not apply if the dam-

age results from the total theft of "your cov-

ered auto" or any "non-owned auto".

3. Loss due to or as a consequence of:

a. Radioactive contamination;

b. Discharge of any nuclear weapon (even if

accidental);

c. War (declared or undeclared);

d. Civil war;

e. Insurrection; or

f. Rebellion or revolution.

4. Loss to any electronic equipment designed for

the reproduction of sound and any accessories

used with such equipment. This includes but is

not limited to:

a. Radios and stereos;

b. Tape decks; or

c. Compact disc players.

This Exclusion (4.) does not apply to equip-

ment designed solely for the reproduction of

sound and accessories used with such equip-

ment, provided:

a. The equipment is permanently installed in

"your covered auto" or any "non-owned

auto"; or

b. The equipment is:

(1) Removable from a housing unit which is

permanently installed in the auto;

(2) Designed to be solely operated by use

of the power from the auto's electrical

system; and

(3) In or upon "your covered auto" or any

"non-owned auto" at the time of loss.

5. Loss to any electronic equipment that receives

or transmits audio, visual or data signals and

any accessories used with such equipment.

This includes but is not limited to:

a. Citizens band radios;

b. Telephones;

c. Two-way mobile radios;

d. Scanning monitor receivers;

e. Television monitor receivers;

f. Video cassette recorders;

g. Audio cassette recorders; or

h. Personal computers.

This Exclusion (5.) does not apply to:

a. Any electronic equipment that is necessary

for the normal operation of the auto or the

monitoring of the auto's operating systems;

PP 00 01 06 98

Page 9 of 12

b. A permanently installed telephone designed

to be operated by use of the power from

the auto's electrical system and any acces-

sories used with the telephone.

6. Loss to tapes, records, discs or other media

used with equipment described in Exclusions

4. and 5.

7. A total loss to "your covered auto" or any "non-

owned auto" due to destruction or confiscation

by governmental or civil authorities.

This Exclusion (7.) does not apply to the inter-

ests of Loss Payees in "your covered auto".

8. Loss to:

a. A "trailer", camper body, or motor home,

which is not shown in the Declarations; or

b. Facilities or equipment used with such

"trailer", camper body or motor home. Fa-

cilities or equipment include but are not

limited to:

(1) Cooking, dining, plumbing or refrigera-

tion facilities;

(2) Awnings or cabanas; or

(3) Any other facilities or equipment used

with a "trailer", camper body, or motor

home.

This Exclusion (8.) does not apply to a:

a. "Trailer", and its facilities or equipment,

which you do not own; or

b. "Trailer", camper body, or the facilities or

equipment in or attached to the "trailer" or

camper body, which you:

(1) Acquire during the policy period; and

(2) Ask us to insure within 14 days after you

become the owner.

9. Loss to any "non-owned auto" when used by

you or any "family member" without a reason-

able belief that you or that "family member"

are entitled to do so.

10. Loss to equipment designed or used for the

detection or location of radar or laser.

11. Loss to any custom furnishings or equipment in

or upon any pickup or van. Custom furnishings

or equipment include but are not limited to:

a. Special carpeting or insulation;

b. Furniture or bars;

c. Height-extending roofs; or

d. Custom murals, paintings or other decals or

graphics.

This Exclusion (11.) does not apply to a

cap, cover or bedliner in or upon any "your

covered auto" which is a pickup.

12. Loss to any "non-owned auto" being main-

tained or used by any person while employed

or otherwise engaged in the "business" of:

a. Selling;

b. Repairing;

c. Servicing;

d. Storing; or

e. Parking;

vehicles designed for use on public highways.

This includes road testing and delivery.

13. Loss to "your covered auto" or any "non-owned

auto", located inside a facility designed for

racing, for the purpose of:

a. Competing in; or

b. Practicing or preparing for;

any prearranged or organized racing or speed

contest.

14. Loss to, or loss of use of, a "non-owned auto"

rented by:

a. You; or

b. Any "family member";

if a rental vehicle company is precluded from

recovering such loss or loss of use, from you

or that "family member", pursuant to the pro-

visions of any applicable rental agreement or

state law.

LIMIT OF LIABILITY

A. Our limit of liability for loss will be the lesser of

the:

1. Actual cash value of the stolen or damaged

property; or

2. Amount necessary to repair or replace the

property with other property of like kind and

quality.

However, the most we will pay for loss to:

1. Any "non-owned auto" which is a trailer is

$500.

2. Equipment designed solely for the reproduc-

tion of sound, including any accessories used

with such equipment, which is installed in loca-

tions not used by the auto manufacturer for

installation of such equipment or accessories,

is $1,000.

B. An adjustment for depreciation and physical

condition will be made in determining actual cash

value in the event of a total loss.

C. If a repair or replacement results in better than

like kind or quality, we will not pay for the amount

of the betterment.

Page 10 of 12

PP 00 01 06 98

PAYMENT OF LOSS

We may pay for loss in money or repair or replace

the damaged or stolen property. We may, at our

expense, return any stolen property to:

1. You; or

2. The address shown in this policy.

If we return stolen property we will pay for any dam-

age resulting from the theft. We may keep all or part

of the property at an agreed or appraised value.

If we pay for loss in money, our payment will include

the applicable sales tax for the damaged or stolen

property.

NO BENEFIT TO BAILEE

This insurance shall not directly or indirectly benefit

any carrier or other bailee for hire.

OTHER SOURCES OF RECOVERY

If other sources of recovery also cover the loss, we

will pay only our share of the loss. Our share is the

proportion that our limit of liability bears to the total of

all applicable limits. However, any insurance we

provide with respect to a "non-owned auto" shall be

excess over any other collectible source of recovery

including, but not limited to:

1. Any coverage provided by the owner of the

"non-owned auto";

2. Any other applicable physical damage insur-

ance;

3. Any other source of recovery applicable to the

loss.

APPRAISAL

A. If we and you do not agree on the amount of loss,

either may demand an appraisal of the loss. In

this event, each party will select a competent ap-

praiser. The two appraisers will select an umpire.

The appraisers will state separately the actual

cash value and the amount of loss. If they fail to

agree, they will submit their differences to the

umpire. A decision agreed to by any two will be

binding. Each party will:

1. Pay its chosen appraiser; and

2. Bear the expenses of the appraisal and umpire

equally.

B. We do not waive any of our rights under this pol-

icy by agreeing to an appraisal.

PART E – DUTIES AFTER AN ACCIDENT OR LOSS

We have no duty to provide coverage under this

policy unless there has been full compliance with the

following duties:

A. We must be notified promptly of how, when and

where the accident or loss happened. Notice

should also include the names and addresses of

any injured persons and of any witnesses.

B. A person seeking any coverage must:

1. Cooperate with us in the investigation, settle-

ment or defense of any claim or suit.

2. Promptly send us copies of any notices or

legal papers received in connection with the

accident or loss.

3. Submit, as often as we reasonably require:

a. To physical exams by physicians we select.

We will pay for these exams.

b. To examination under oath and subscribe

the same.

4. Authorize us to obtain:

a. Medical reports; and

b. Other pertinent records.

5. Submit a proof of loss when required by us.

C. A person seeking Uninsured Motorists Coverage

must also:

1. Promptly notify the police if a hit-and-run

driver is involved.

2. Promptly send us copies of the legal papers if

a suit is brought.

D. A person seeking Coverage For Damage To Your

Auto must also:

1. Take reasonable steps after loss to protect

"your covered auto" or any "non-owned auto"

and their equipment from further loss. We will

pay reasonable expenses incurred to do this.

2. Promptly notify the police if "your covered

auto" or any "non-owned auto" is stolen.

3. Permit us to inspect and appraise the dam-

aged property before its repair or disposal.

PP 00 01 06 98

Page 11 of 12

PART F – GENERAL PROVISIONS

BANKRUPTCY

Bankruptcy or insolvency of the "insured" shall not

relieve us of any obligations under this policy.

CHANGES

A. This policy contains all the agreements between

you and us. Its terms may not be changed or

waived except by endorsement issued by us.

B. If there is a change to the information used to

develop the policy premium, we may adjust your

premium. Changes during the policy term that

may result in a premium increase or decrease in-

clude, but are not limited to, changes in:

1. The number, type or use classification of in-

sured vehicles;

2. Operators using insured vehicles;

3. The place of principal garaging of insured

vehicles;

4. Coverage, deductible or limits.

If a change resulting from A. or B. requires a pre-

mium adjustment, we will make the premium adjust-

ment in accordance with our manual rules.

C. If we make a change which broadens coverage

under this edition of your policy without additional

premium charge, that change will automatically

apply to your policy as of the date we implement

the change in your state. This Paragraph (C.)

does not apply to changes implemented with a

general program revision that includes both

broadenings and restrictions in coverage, whether

that general program revision is implemented

through introduction of:

1. A subsequent edition of your policy; or

2. An Amendatory Endorsement.

FRAUD

We do not provide coverage for any "insured" who

has made fraudulent statements or engaged in

fraudulent conduct in connection with any accident or

loss for which coverage is sought under this policy.

LEGAL ACTION AGAINST US

A. No legal action may be brought against us until

there has been full compliance with all the terms

of this policy. In addition, under Part A, no legal

action may be brought against us until:

1. We agree in writing that the "insured" has an

obligation to pay; or

2. The amount of that obligation has been finally

determined by judgment after trial.

B. No person or organization has any right under this

policy to bring us into any action to determine the

liability of an "insured".

OUR RIGHT TO RECOVER PAYMENT

A. If we make a payment under this policy and the

person to or for whom payment was made has a

right to recover damages from another we shall be

subrogated to that right. That person shall do:

1. Whatever is necessary to enable us to exer-

cise our rights; and

2. Nothing after loss to prejudice them.

However, our rights in this Paragraph (A.) do not

apply under Part D, against any person using

"your covered auto" with a reasonable belief that

that person is entitled to do so.

B. If we make a payment under this policy and the

person to or for whom payment is made recovers

damages from another, that person shall:

1. Hold in trust for us the proceeds of the recov-

ery; and

2. Reimburse us to the extent of our payment.

POLICY PERIOD AND TERRITORY

A. This policy applies only to accidents and losses

which occur:

1. During the policy period as shown in the Decla-

rations; and

2. Within the policy territory.

B. The policy territory is:

1. The United States of America, its territories or

possessions;

2. Puerto Rico; or

3. Canada.

This policy also applies to loss to, or accidents in-

volving, "your covered auto" while being trans-

ported between their ports.

TERMINATION

A. Cancellation

This policy may be cancelled during the policy

period as follows:

1. The named insured shown in the Declarations

may cancel by:

a. Returning this policy to us; or

b. Giving us advance written notice of the

date cancellation is to take effect.

2. We may cancel by mailing to the named in-

sured shown in the Declarations at the address

shown in this policy:

a. At least 10 days notice:

(1) If cancellation is for nonpayment of

premium; or

Page 12 of 12

PP 00 01 06 98

(2) If notice is mailed during the first 60

days this policy is in effect and this is

not a renewal or continuation policy; or

b. At least 20 days notice in all other cases.

3. After this policy is in effect for 60 days, or if

this is a renewal or continuation policy, we will

cancel only:

a. For nonpayment of premium; or

b. If your driver's license or that of:

(1) Any driver who lives with you; or

(2) Any driver who customarily uses "your

covered auto";

has been suspended or revoked. This must

have occurred:

(1) During the policy period; or

(2) Since the last anniversary of the original

effective date if the policy period is

other than 1 year; or

c. If the policy was obtained through material

misrepresentation.

B. Nonrenewal

If we decide not to renew or continue this policy,

we will mail notice to the named insured shown in

the Declarations at the address shown in this pol-

icy. Notice will be mailed at least 20 days before

the end of the policy period. Subject to this notice

requirement, if the policy period is:

1. Less than 6 months, we will have the right not

to renew or continue this policy every 6

months, beginning 6 months after its original

effective date.

2. 6 months or longer, but less than one year, we

will have the right not to renew or continue this

policy at the end of the policy period.

3. 1 year or longer, we will have the right not to

renew or continue this policy at each anniver-

sary of its original effective date.

C. Automatic Termination

If we offer to renew or continue and you or your

representative do not accept, this policy will

automatically terminate at the end of the current

policy period. Failure to pay the required renewal

or continuation premium when due shall mean

that you have not accepted our offer.

If you obtain other insurance on "your covered

auto", any similar insurance provided by this pol-

icy will terminate as to that auto on the effective

date of the other insurance.

D. Other Termination Provisions

1. We may deliver any notice instead of mailing

it. Proof of mailing of any notice shall be suffi-

cient proof of notice.

2. If this policy is cancelled, you may be entitled

to a premium refund. If so, we will send you

the refund. The premium refund, if any, will be

computed according to our manuals. However,

making or offering to make the refund is not a

condition of cancellation.

3. The effective date of cancellation stated in the

notice shall become the end of the policy pe-

riod.

TRANSFER OF YOUR INTEREST IN THIS POLICY

A. Your rights and duties under this policy may not

be assigned without our written consent. However,

if a named insured shown in the Declarations dies,

coverage will be provided for:

1. The surviving spouse if resident in the same

household at the time of death. Coverage ap-

plies to the spouse as if a named insured

shown in the Declarations; and

2. The legal representative of the deceased per-

son as if a named insured shown in the Decla-

rations. This applies only with respect to the

representative's legal responsibility to maintain

or use "your covered auto".

B. Coverage will only be provided until the end of the

policy period.

TWO OR MORE AUTO POLICIES

If this policy and any other auto insurance policy

issued to you by us apply to the same accident, the

maximum limit of our liability under all the policies

shall not exceed the highest applicable limit of liability

under any one policy.